Financial stress linked to risk of chronic disease

Professor Ina Shaw of the University of Johannesburg, Momentum’s Head of Momentum Multiply Rewards.

Financial woes don’t just affect your wallet and lifestyle – it also has a substantial negative effect on your physical health. And once this happens, it may have a further negative impact on your financial situation, creating a cycle that can repeat itself over and over again. This staggering link between financial stress and ill health in South Africa accrues from a research paper by Momentum titled “Financial wellness and debt as a predictor of physical wellness and claims”.

Stress in general – which could result from financial worries - is a risk factor for mental and physical conditions, with those affected experiencing conditions such as anxiety, depression, migraines, ulcers, sleep disturbances and heart attacks.

In particular, financial stress can be one of the most difficult risks to manage as it normally takes consumers a long period of time to just admit that they have financial problems. And by then the financial stress has already manifested itself in ill health. This also affects the whole family and can also lead to unhealthy coping mechanisms or habits, causing further health problems.

“The research shows a clear link between consumers’ financial health and their physical health,” says Shaw. “Put differently, there is a relationship between the level and state of consumers’ indebtedness and their likelihood of suffering from chronic diseases, which in turn will have a negative impact on their financial situation.”

According to Shaw, the study shows that consumers who are constantly in arrears with debt repayments are more likely to suffer from abnormal high blood pressure, than those who weren’t. This is an indication that financial issues trigger health problems. In addition, consumers who are constantly in arrears with debt repayments are also more likely to have high glucose measurements than those who weren’t, signalling possible diabetes problems.

These health risks stemming from financial stress also manifested themselves in the medical aid claims of consumers. The research shows that once consumers’ unsecured debt reached 20 times their monthly gross income, their chronic medical aid claims almost doubled for all age and income groups. Unsecured debt normally reaches this point when consumers are in dire straits, in that they have to borrow to repay other debts and this is an indication of financial stress.

What’s more is that poor health can also lead to financial stress once consumers have to incur out of pocket expenses to make co-payments to doctors, medicine and hospital treatment. This normally negatively affects consumers’ cash flow and leads to them falling in arrears with accounts or debts, which causes them to borrow even more to pay these accounts and debts. However, this will affect consumers’ cash flow even further as they have to fork out even more money for debt repayments, leaving less money for other outlays such as food or transport costs. This increases the financial stress thus perpetuating the cycle of more health expenses and stress.

According to Momentum, the first step to attaining overall Financial Wellness is to plan and manage your money with a budget, financial plan and financial advice from experts. This will assist in early detection of problems and seeking advice as soon as possible. The importance of financial expertise is evident in their study, which revealed that the top 5% of South Africans with a good credit score, had sought expert advice.

Financial stress can also be reduced by practising better health habits, such as doing regular exercise, and following a balanced diet.

George Kolbe, Head of Marketing for Life Insurance at Momentum says, “At Momentum we endeavour to always enhance the Financial Wellness of our clients. In addition to this, we are committed to encouraging better financial- and physical health through our Multiply wellness and rewards programme, which results in a noticeable improvement in average life expectancy. In South Africa, the average life expectancy for the insured population is 67, while the average life expectancy for Momentum Multiply members, on the higher status levels, is 89. This is even longer than that of the Japanese population, who at 85 years, has the longest average life expectancy in the world.

“Wellness and reward programmes that encourage and reward clients who adopt a healthy lifestyle and are physically active, can help reduce the risk of suffering a claim event significantly.”